Unsecured loans are new route to secure favours

New Delhi, June 13: Unsecured loans have become new tools of corruption at highest level of government. This quid pro quo mode was taken in both coal block allocation scam and Spectrum allocation or the 2G scam.

The CBI has revealed that a company owned by former and current directors of the Naveen Jindal Group, and then by Jindal himself (Jindal Realty), gave an unsecured loan of Rs 2.25 crore in 2008 to a trading firm (ND Exim). This loan was used to buy new shares at Rs 112.5 apiece, about four times the market price (Rs 28), of a company (Sowbhagya Media) owned by Dasari Narayan Rao.

Dasari Narayan Rao, a former Congress Rajya Sabha MP, was the minister of state for coal between 2004 and 2006, and between 2006 and 2008. Of the 250 coal block allotments made between 2004 and 2011, 154 were made during Rao's tenure.

The Naveen Jindal group was the largest beneficiary of the coal block allotment since his company was allotted a total of 11 blocks.

This unsecured loan route was also used in the Spectrum allocation scam.

In 2011, the CBI had filed an affidavit in Supreme Court that DMK MP MK Kanimozhi was a willful participant in the deal where Swan Telecom paid Rs 200 crore to Kalaignar TV in return for licence and spectrum. "Rs 200 crore paid by Dynamix Realty to Kalaignar TV through Kusegaon Fruits & Vegetables and Cineyug Films was in the nature of illegal gratification paid in lieu of spectrum licences and other undue benefit given by accused public servants to Swan Telecom," the CBI said in its 47-page affidavit opposing bail pleas of Kanimozhi and Kalaignar TV MD Sharad Kumar.

The money transfer was routed through three companies as unsecured loans and it is reflected in their audited balance-sheets and annual returns.

The agency's affidavit gave out in great detail how Kanimozhi was instrumental in the launch of Kalaignar TV, a political project of the DMK, and was party to the transaction where Swan Telecom routed Rs 200 crore to the channel just after it got the licence and spectrum from sacked telecom minister A Raja.

But the channel's Managing Director Sharad Kumar had claimed that "there is no link between the 2G Spectrum allocation done in 2007-08 and the loan transaction that took place between Kalaignar TV and Cineyug Films private limited in 2009."

The CBI started probing the allocation of coal mines following the Comptroller and Auditor General of India (CAG) report that pegged a notional loss of Rs1.86 lakh crore due to faulty allocation process. The FIRs in the scam accuse corporates of overstating their net worth, failing to disclose prior coal allocations, and hoarding rather than developing coal allocation.

In the Spectrum allocation scam or better known by shorter 2G scam, the CAG had put the loss at Rs 1.76 lakh crore. The scam was about politicians and officials illegally undercharging mobile telephony companies for frequency allocation licenses.